Coach is starting to shut down a huge part of its business

The company reported that even though comparable sales for its
North American stores were up 2%, department-store net sales were
down in the "high single digits."

When department stores falter, they can erode a brand like
Coach's reputation.

But the company has announced on Tuesday
morning that, come fiscal 2017 — which is the next quarter
for Coach — it will be shuttering 25% of its 1,000-plus wholesale
locations along with a "reduction in markdown allowances."

Coach CEO Victor Luis told Brian Sozzi of
TheStreet in a
Periscope interview that these "moves are really
meant to reduce the smallest doors that we have, and to ensure in
the doors that ... remain that our brand is going to be
first and foremost managed effectively and not have our pricing
be overly promotional, which impacts not only consumer perception
about the brand but also creates confusion across the various
channels."

"Overall, we believe in the department
store channel and believe it's a great place for consumers to
come in and cross shop — but, we believe most in protecting and
focusing our investments in the long-term health of the brand,"
he said.

In Coach's own stores, it can maintain its status and
control promotions and presentation.

The company has been working to turn
itself around with improved products and updated stores.
Meanwhile,
department stores remain a threat to the accessible
luxury-handbag category, as the brand cannot control the
promotions that department stores choose to execute.

The full Periscope interview, on Twitter, with Luis and
Sozzi is posted below: